Why you should care

In Lisbon, a new creative economy is emerging from Portugal’s economic disaster. Smart policy is partly to thank, but then again, Lisbon has few other options.

By Laura Secorun Palet

The Daily DoseAUG 21 2014

Will Dyer came to Portugal for the waves but ended up staying for the art. “I was expecting a poor country with a good surf scene, but Lisbon has blown my mind. There is so much cultural stuff happening here,” the 28-year-old from Melbourne, Australia, tells OZY.

He’s decided to stay a month to explore places like the LX Factory, the beating heart of Lisbon’s new creative scene. This once derelict industrial complex in Alcantara, near the port, now looks like a cross between a Western movie set and a trendy East London market, with long, dusty roads and warehouses buzzing with hip restaurants, shops, bookstores and galleries created by ingenious locals and frequented by design-savvy tourists.

It’s like a village, but our clients are from all over the world.

LX Factory is just one of the many artistic spaces popping up in Lisbon. Like the graffiti that grows on the city’s rundown buildings, a new creative industry is taking over Portugal’s capital.

“I really do not know any other place with this atmosphere. It’s like a village, but our clients are from all over the world,” says Margarida Eusébio, owner of local interior design firm and concept store Wish.

This creative renaissance, it turns out, is not spontaneous, but rather the product of opportunistic public policy. In times of crisis, most governments take the knife to spending aimed at promoting art, design or publishing. But continental Europe’s westernmost capital decided instead to concentrate scarce resources on its “creative economy.”

LX Factory

Source Laura Secorun Palet

There may not be much choice, given the sad state of Portugal’s economy. Still, investing in creativity seems to be paying off. “Lisbon is going through the same process that Barcelona or Berlin went through in the ’90s. It attracts creativity because it unites modernity to a rich cultural past and conveys a captivating liveliness,” says Bruno Gomes from the incubator Startup Lisboa. Creative types now account for some 20 percent of Berlin’s GDP.

Being a crisis-born agency allows us to adapt better to the market.

And Lisbon’s has perks that established creative hubs just can’t touch. Unlike Barcelona, tourists haven’t completely overrun it. The cost of living is laughably cheap compared to London: $1800 for a small apartment and a $5 for beer, while in Lisbon it’s $470 and $1.50 respectively. And Berlin’s dreary skies can’t begin to compete with Lisbon’s 200 days of sunshine every year.

To be sure, Portugal’s economy is in the tank, and Lisbon’s creative scene is a lonely bright spot. Unemployment is still at 15.2 percent, GDP is expected to grow this year by just 1.4 percent, and the fragility of Portugal’s banks continues to scare markets and investors.

The decline of local demand is also clipping the wings of these new companies. That’s why the majority of people roaming the dusty alleys of the LX Factory are foreigners, and many creative startups work mostly with clients from places like the U.K., France, Brazil and even Angola.

Source Laura Secorun Palet

Still, creatives say the economic downturn has been good for them. “We wouldn’t have a business if it weren’t for the crisis,” says Nuno Cruces, an energetic 30-year-old who last year co-founded BeeInsight, a software development agency. “When you don’t have anything to lose and no jobs to apply for, you get the courage to create your own thing.”

“Being a crisis-born agency allows us to adapt better to the market,” says Lisboner Pedro Lago de Freitas from branding agency Brandworkers, which has designed PR campaigns for small companies since 2011. “People have lower budgets, meaning they are less interested in working with big, expensive agencies. So we created a small company but packed with talent.”

There are 22,000 ”creative companies,” which can now access Lisbon’s more than 20 co-working spaces, four fab labs and 13 startup incubators.

Many young Portuguese are seeking work abroad, but Lisbon might soon attract talent. “It’s the best city in the world to be a creative,” says Natacha Duarte, a busy 34-year-old freelance textile designer who spent seven years working in Spain and creates patterns for labels like Zara. “Lisbon is a great place to live and is not yet saturated like London or Berlin are. New ideas and creative business are always welcome.”

Lisbon’s City Council is going all out to support it. “The ultimate goal is to create jobs,” says Paulo Soeiro de Carvalho, general director for economy and innovation. “We hope new companies will generate employment, bring investment and help economic recovery.” The Lisbon region already generates about 30 percent of creative employment and almost half the industry’s gross value in the country.

Ler Devagar bookstore

Source Laura Secorun Palet

With money short, government strategy is to bring creative players together and nurture a supporting infrastructure. There are 22,000 “creative companies” — from fashion to architecture — and all of them can now access Lisbon’s more than 20 co-working spaces, four fab labs and 13 startup incubators, paid for by funds from private companies, foundations and the City Council, whose flagship project, Startup Lisboa, is downtown.

The growing industry has helped to rehabilitate historic buildings, reuse obsolete infrastructure and turn abandoned areas into what the council calls “creative districts.”

Pensão Amor in Cais do Sodré is a renovated 18th-century house for prostitutes now with a bookstore and spaces for concerts and ateliers; the old Braço de Prata Factory is now a legal artistic squat, in Poço do Bispo; the area of Santos is branding itself as Santos Design District; and even Intendente, a neighborhood notorious for drugs and prostitution, is getting a face-lift thanks to spaces like Casa Independente, a beautiful 19th-century palace.

The council is designing several microfinance projects to fund ventures and next year will launch the city’s own crowdfunding platform, in partnership with the philanthropic Foundation Calouste Gulbenkian, the bank Montepio and several universities.

Of course this creative renaissance could eventually boost prices, gentrify the city and price young creatives out of the market. That, however, looks like success and is unlikely to happen soon.